Deal Wireless, LLC et al v. Selective Way Insurance Company

Filing 79

OPINION AND ORDER Denying Defendant's Motion to Enforce Settlement 64 , Denying Plaintiffs' Motion to Strike Settlement 68 , and Denying Plaintiffs' Motion to Strike 72 . Signed by District Judge Denise Page Hood. (LSau)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
DEAL WIRELESS, LLC, et al.,
Plaintiffs,
Civil Action No. 15-14280
v.
HONORABLE DENISE PAGE HOOD
SELECTIVE WAY INSURANCE
COMPANY,
Defendant.
______________________________/
OPINION AND ORDER DENYING DEFENDANT’S MOTION TO
ENFORCE SETTLEMENT [#64], DENYING PLAINTIFFS’ MOTION TO
STRIKE SETTLEMENT [#68], AND DENYING PLAINTIFFS’ MOTION
TO STRIKE [#72]

A. BACKGROUND
On December 8, 2015, Plaintiffs Deal Wireless, LLC (“Deal Wireless”) and
All USA Wireless, LLC (“All USA Wireless”) (collectively, “Plaintiffs”) brought
this action against Defendant Selective Way Insurance Company (“Selective Way”),
alleging Defendant breached its insurance contract with Plaintiffs following an
insurance claim arising out of a fire at Plaintiffs’ cell phone store in Madison
Heights, Michigan. (Doc # 1) On January 6, 2017, Plaintiffs’ counsel Marc A.
Deldin (“Deldin”) filed a Motion to Withdraw as Counsel for Plaintiffs and to
Impose a Lien on any Recovery, and Stay Proceedings. (Doc # 40) Deldin argued
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that he had just cause to withdraw as counsel for Plaintiffs because they breached
their agreement with Deldin and refused to cooperate with him after executing an
initial settlement agreement that resolved this matter for $185,000. (Id.) The Court
granted Deldin’s Motion. (Doc # 48) Deldin filed a Motion to Determine Extent of
Attorney’s Charging Lien on September 13, 2017. (Doc # 50) The Court entered
an Order granting Deldin’s request for lien. (Doc # 63) Attorney Larry R. Polk
appeared on behalf of Plaintiffs on October 5, 2017. (Doc # 54)
This matter is before the Court on Defendant’s Motion to Enforce Settlement
Agreement, Impose Sanctions and Award Attorney Fees (Doc # 64), Plaintiffs’
Motion to Strike and/or Set Aside the Settlement Agreement (Doc # 68), and
Plaintiffs’ Motion to Strike Defendant’s Response to Plaintiffs’ Response to the
Motion to Enforce Settlement and Attorney Affidavit (Doc # 72). All Responses
and Replies have been filed.
B. ANALYSIS
For a federal court to retain jurisdiction over a matter following a settlement
agreement, there must be a basis for jurisdiction. Kokkonen v. Guardian Life
Insurance Co., of America, 511 U.S. 375, 378 (1994). A district court may retain
jurisdiction of matter after settlement by (1) conditioning dismissal, when it is
pursuant to Federal Rule of Civil Procedure 41(a)(2), on the parties’ compliance with
the terms of the settlement agreement; or (2) incorporating the settlement agreement
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in the dismissal order or retaining jurisdiction over the settlement agreement when
it is pursuant to Federal Rule of Civil Procedure 41(a)(1)(ii). Kokkonen, 511 U.S.
375, 381-82. Where a court retains jurisdiction, “a breach of the agreement would
be a violation of the order, and ancillary jurisdiction to enforce the agreement would
therefore exist.” Kokkenen, 551 U.S., at 381. Where jurisdiction is not retained,
“enforcement of the settlement is for state courts, unless there is some independent
basis for federal jurisdiction.” Id. at 383.
Defendant has not established a basis for a federal court to exercise
jurisdiction over the present Motion to Enforce the Settlement Agreement. “A
settlement agreement is a type of contract and is therefore governed by contract law.”
Neely v. Good Samaritan Hosp., 354 Fed. Appx. 39, 43 (6th Cir. 2009). Plaintiffs
cause of action for breach of an insurance contract is not factually related to the
breach of the settlement agreement between Plaintiffs and Defendant. Defendant’s
Motion to Enforce Settlement Agreement, Impose Sanctions and Award Attorney
Fees is a separate cause of action under state contract law.
There has been no dismissal and no indication that this Court retains
jurisdiction over the settlement agreement. Defendant has not provided facts to
establish a basis for federal jurisdiction.

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C. CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Defendant’s Motion to Enforce Settlement
Agreement, Impose Sanctions and Award Attorney Fees (Doc # 64) is DENIED.
IT IS FURTHER ORDERED that Plaintiffs’ Motion to Strike and/or Set
Aside the Settlement Agreement (Doc # 68) is DENIED.
IT IS FURTHER ORDERED that Plaintiffs’ Motion to Strike Defendant’s
Response to Plaintiffs’ Response to the Motion to Enforce Settlement and Attorney
Affidavit (Doc # 72) is DENIED.
IT IS FURTHER ORDERED that a Status Conference is set for September
17, 2018, at 1:30 p.m., as there has been no dismissal entered and this remains an
open case on the Court’s docket.

S/Denise Page Hood
Denise Page Hood
Chief Judge, United States District Court
Dated: August 17, 2018
I hereby certify that a copy of the foregoing document was served upon counsel of
record on August 17, 2018, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
Case Manager

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